Did Duke Energy Corporation's (NYSE:DUK) Recent Earnings Growth Beat The Trend?
Measuring Duke Energy Corporation's (NYSE:DUK) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess DUK's recent performance announced on 31 December 2019 and compare these figures to its historical trend and industry movements.
View our latest analysis for Duke Energy
Commentary On DUK's Past Performance
DUK's trailing twelve-month earnings (from 31 December 2019) of US$3.7b has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.0%, indicating the rate at which DUK is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is solely because of industry tailwinds, or if Duke Energy has seen some company-specific growth.
In terms of returns from investment, Duke Energy has fallen short of achieving a 20% return on equity (ROE), recording 7.5% instead. Furthermore, its return on assets (ROA) of 3.7% is below the US Electric Utilities industry of 4.2%, indicating Duke Energy's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Duke Energy’s debt level, has declined over the past 3 years from 4.9% to 4.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 104% to 126% over the past 5 years.
What does this mean?
Duke Energy's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Duke Energy to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for DUK’s future growth? Take a look at our free research report of analyst consensus for DUK’s outlook.
Financial Health: Are DUK’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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